Strata Power (SPOWF) 20-F 30 Apr 14 2013 FY Annual report (foreign) Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013
Document And Entity Information	'
Entity Registrant Name	'Strata Oil & Gas, Inc.
Entity Central Index Key	'0001227282
Document Type	'20-F
Document Period End Date	31-Dec-13
Amendment Flag	'false
Current Fiscal Year End Date	'--12-31
Is Entity a Well-known Seasoned Issuer?	'No
Is Entity a Voluntary Filer?	'No
Is Entity's Reporting Status Current?	'Yes
Entity Filer Category	'Smaller Reporting Company
Entity Public Float	$0
Entity Common Stock, Shares Outstanding	85,728,506
Document Fiscal Period Focus	'FY
Document Fiscal Year Focus	'2013

BALANCE_SHEETS

BALANCE SHEETS (USD $)	Dec. 31, 2013	Dec. 31, 2012
Current	'	'
Cash	$440,612	$134,125
GST receivables	6,385	220
Note receivable	65,814	0
Prepaid expenses	0	5,002
Total current assets	512,811	139,347
Deposits	121,870	123,634
Office equipment, net (Note 3)	0	0
Oil and gas property interests (Note 6)	7,784,848	8,195,885
Liabilities and Stockholders' Equity	'	'
Total assets	8,419,529	8,458,866
Current	'	'
Accounts payable (Note8)	1,526	19,459
Accrued liabilities	0	14,970
Derivative liability (Note 5)	5,178,906	2,342,989
Total current liabilities	5,180,432	2,377,418
Asset retirement obligations (Note 7)	139,623	138,129
Total liabilities	5,320,055	2,515,547
Commitments and contingencies (Note 13)	'	'
Stockholders' equity	'	'
Preferred stock, no par value, unlimited shares authorized and unissued	0	0
Common stock, no par value, unlimited shares authorized; 85,728,506 shares issued and outstanding at December 31, 2013 (2012 – 74,643,710)	0	0
Additional paid-in capital	21,304,071	21,069,422
Accumulated deficit	-2,748,790	-2,748,790
Deficit accumulated during the exploration stage	-15,914,965	-13,116,796
Accumulated other comprehensive income	'	'
Foreign currency translation adjustments	459,158	739,483
Total stockholders' equity	3,099,474	5,943,319
Total Liabilities and Stockholders' Equity	$8,419,529	$8,458,866

BALANCE_SHEETS_Parenthetical

BALANCE SHEETS (Parenthetical)	Dec. 31, 2013	Dec. 31, 2012
Balance Sheets Parenthetical	'	'
Common stock shares issued	85,728,506	74,643,710
Common stock shares outstanding	85,728,506	74,643,710

STATEMENTS_OF_OPERATIONS_AND_C

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $)	12 Months Ended			102 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Expenses	'	'	'	'
Salaries and benefits	$0	$0	$0	$67,335
Professional fees	86,834	76,153	46,599	491,490
Office and sundry	24,018	32,845	29,525	553,806
Rent	1,665	1,667	31,539	260,310
Consulting fees (including $80,080 $40,826 and $3,000 of non-employee stock compensation expense for 2013, 2012 and 2011, Notes 3 & 8)	448,338	120,798	57,856	10,271,081
Transfer agent fees	3,267	1,642	692	18,317
Loss on disposal of properties (Note 6)	'	0	0	731,866
Accretion expense (Note 7)	10,487	7,500	8,647	47,745
Depreciation	0	1,388	2,394	17,248
Total expenses	-574,609	-241,995	-177,252	-12,459,199
Other income (expense)	'	'	'	'
Interest and miscellaneous income	1,339	5,524	128	145,090
Interest expense	0	0	0	-26,444
Loss on disposal of shares	0	0	0	-37,736
Gain on settlement of loan	0	0	0	115,343
Foreign exchange loss	-8,780	0	0	-8,780
Change in fair value of derivative liability (Note 5)	-2,216,119	-1,620,319	1,806,379	-3,765,994
Total other income (expense)	-2,223,560	-1,614,795	1,806,507	-3,578,522
Income (loss) from continuing operations	-2,798,169	-1,856,790	1,629,255	-16,037,720
Income (loss) from discontinued operations	0	0	0	122,755
Net income (loss) for the period	-2,798,169	-1,856,790	1,629,255	-15,914,965
Other comprehensive income (loss)	'	'	'	'
Foreign currency translation adjustment	-280,325	168,351	-111,582	459,158
Comprehensive income (loss)	($3,078,494)	($1,688,439)	$1,517,673	($15,455,807)
Basis and diluted earnings (loss) per share (Note 9)	'	'	'	'
Basic income (loss) per common share	($0.03)	($0.03)	$0.02	'
Diluted income (loss) per common share	($0.03)	($0.03)	$0.02	'
Basic weighted average number of shares outstanding	80,057,824	71,340,773	68,847,251	'
Diluted weighted average number of shares outstanding (Note 9)	80,057,824	71,340,773	69,185,451	'

STATEMENTS_OF_OPERATIONS_AND_C1

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $)	12 Months Ended					102 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2013
Statements Of Operations And Comprehensive Income Loss Parenthetical	'	'	'	'	'	'
Non-employee stock compensation expense	$80,080	$40,826	$3,000	$4,775	$94,164	$8,774,945

STATEMENTS_OF_CHANGES_IN_STOCK

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (USD $)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Other Comprehensive Income (Loss)	Total
		USD ($)	USD ($)	USD ($)	USD ($)
Beginning balance at Jun. 30, 2005	'	$2,896,421	($2,748,790)	($29,816)	$117,815
Beginning balance (shares) at Jun. 30, 2005	43,667,888	'	'	'	'
Private placement common stock issuances for cash (shares)	560,000	'	'	'	'
Private placement common stock issuances for cash	'	210,000	'	'	210,000
Issuance of common shares as collateral for a loan	240,000,000	'	'	'	'
Cancellation of common shares upon repayment of the loan	-240,000,000	'	'	'	'
Stock-based compensation	'	1,691,671	'	'	1,691,671
Net loss and comprehensive loss	'	'	-1,866,518	-390	-1,866,908
Ending balance at Dec. 31, 2005	'	4,798,092	-4,615,308	-30,206	152,578
Ending balance (shares) at Dec. 31, 2005	44,227,888	'	'	'	'
Private placement common stock issuances for cash (shares)	500,000	'	'	'	'
Private placement common stock issuances for cash	'	1,000,000	'	'	1,000,000
Stock option exercises (shares)	7,324,000	'	'	'	'
Stock option exercises	'	5,151,990	'	'	5,151,990
Warrant exercises (shares)	4,523,200	'	'	'	'
Warrant exercises	'	508,860	'	'	508,860
Stock-based compensation	'	6,746,118	'	'	6,746,118
Net loss and comprehensive loss	'	'	-6,747,405	-328,092	-7,075,497
Ending balance at Dec. 31, 2006	'	18,205,060	-11,362,713	-358,298	6,484,049
Ending balance (shares) at Dec. 31, 2006	56,575,088	'	'	'	'
Stock option exercises (shares)	1,166,000	'	'	'	'
Stock option exercises	'	164,260	'	'	164,260
Warrant exercises (shares)	2,120,000	'	'	'	'
Warrant exercises	'	337,500	'	'	337,500
Stock-based compensation	'	-120,151	'	'	-120,151
Net loss and comprehensive loss	'	'	-454,725	950,379	495,654
Ending balance at Dec. 31, 2007	'	18,586,669	-11,817,438	592,081	7,361,312
Ending balance (shares) at Dec. 31, 2007	59,861,088	'	'	'	'
Private placement common stock issuances for cash (shares)	1,700,000	'	'	'	'
Private placement common stock issuances for cash	'	1,700,000	'	'	1,700,000
Warrant exercises (shares)	320,000	'	'	'	'
Warrant exercises	'	60,000	'	'	60,000
Stock-based compensation	'	94,730	'	'	94,730
Net loss and comprehensive loss	'	'	-641,743	-1,473,542	-2,115,285
Ending balance at Dec. 31, 2008	'	20,441,399	-12,459,181	-881,461	7,100,757
Ending balance (shares) at Dec. 31, 2008	61,881,088	'	'	'	'
Cumulative adjustment	'	-2,279,016	-139,732	'	-2,418,748
Warrant exercises (shares)	3,250,000	'	'	'	'
Warrant exercises	'	413,750	'	'	413,750
Derivative liability adjustments	'	1,410,405	'	'	1,410,405
Stock compensation, non-employees	'	94,164	'	'	94,164
Net loss and comprehensive loss	'	'	-6,541,176	1,172,706	-5,368,470
Ending balance at Dec. 31, 2009	'	20,080,702	-19,140,089	291,245	1,231,858
Ending balance (shares) at Dec. 31, 2009	65,131,088	'	'	'	'
Warrant exercises (shares)	1,733,335	'	'	'	'
Warrant exercises	'	200,000	'	'	'
Derivative liability adjustments	'	740,119	'	'	'
Stock compensation, non-employees	'	4,775	'	'	4,775
Net loss and comprehensive loss	'	'	3,502,038	391,469	'
Ending balance at Dec. 31, 2010	'	21,025,596	-15,638,051	682,714	6,070,259
Ending balance (shares) at Dec. 31, 2010	69,412,043	'	'	'	'
Private placement common stock issuances for cash (shares)	2,547,620	'	'	'	'
Private placement common stock issuances for cash	'	325,716	'	'	325,716
Warrant exercises	'	'	'	'	0
Derivative liability adjustments	'	-325,716	'	'	-325,716
Stock compensation, non-employees	'	3,000	'	'	3,000
Net loss and comprehensive loss	'	'	1,629,255	-111,582	1,517,673
Ending balance at Dec. 31, 2011	'	21,028,596	-14,008,796	571,132	7,590,932
Ending balance (shares) at Dec. 31, 2011	69,412,043	'	'	'	'
Private placement common stock issuances for cash (shares)	5,231,667	'	'	'	'
Private placement common stock issuances for cash	'	226,400	'	'	'
Warrant exercises	'	'	'	'	0
Stock-based compensation	'	40,826	'	'	'
Derivative liability adjustments	'	-226,400	'	'	740,119
Stock compensation, non-employees	'	'	'	'	40,826
Net loss and comprehensive loss	'	'	-1,856,790	168,351	-1,688,439
Ending balance at Dec. 31, 2012	'	21,069,442	-15,865,586	739,483	5,943,319
Ending balance (shares) at Dec. 31, 2012	74,643,710	'	'	'	'
Private placement common stock issuances for cash (shares)	10,459,796	'	'	'	'
Private placement common stock issuances for cash	'	969,502	'	'	969,502
Stock option exercises (shares)	'	'	'	'	-625,000
Warrant exercises (shares)	625,000	'	'	'	'
Warrant exercises	'	37,500	'	'	37,500
Derivative liability adjustments	'	-969,502	'	'	-969,502
Reclassification warrant derivative liability due to warrant exercise	'	117,069	'	'	117,069
Stock compensation, non-employees	'	80,080	'	'	80,080
Net loss and comprehensive loss	'	'	-2,798,169	-280,325	-3,078,494
Ending balance at Dec. 31, 2013	'	$21,304,071	($18,663,755)	$459,158	$3,099,474
Ending balance (shares) at Dec. 31, 2013	85,728,506	'	'	'	'

STATEMENTS_OF_CASH_FLOWS

STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended			102 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Cash flows from operating activities	'	'	'	'
Net income (loss)	($2,798,169)	($1,856,790)	$1,629,255	($15,914,965)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'	'	'
Depreciation and amortization	0	1,388	2,394	17,248
Stock option expense for consulting fees	80,080	40,826	3,000	8,774,945
Accretion expense	10,487	7,500	8,647	47,745
Loss on disposal of shares	0	0	0	37,736
Gain on settlement of loan	0	0	0	-115,343
Gain on sale of software	0	0	0	-130,000
Reversal of liability	0	0	0	-47,483
Change in fair value of derivative liability (Note 5)	2,216,119	1,620,319	-1,806,379	3,765,994
Loss on disposal of oil and gas properties	0	0	0	731,866
Change in assets and liabilities:	'	'	'	'
GST receivables	-6,165	14,871	27,377	-6,165
Prepaid expenses	5,002	3,734	-47	2,346
Accounts payable	-17,933	-11,528	-12,686	-14,302
Accrued liabilities	-14,970	-11,213	-23,423	-4,299
Net cash used in operating activities	-525,549	-190,894	-171,862	-2,851,236
Cash flows from investing activities	'	'	'	'
Deposits	-6,152	-7,462	-2,033	-129,786
Acquisition of oil and gas interests	-107,391	-113,541	-66,212	-8,181,977
Proceeds from the sale of oil and gas properties (Note 6)	0	0	0	303,833
Acquisition of office equipment	0	0	-1,511	-11,614
Notes receivable advances	-65,814	0	0	-65,814
Proceeds on the sale of investments	0	0	0	77,607
Proceeds on the sale of software	0	0	0	130,000
Net cash provided by (used in) investing activities	-179,357	-121,003	-69,756	-7,877,751
Cash flows from financing activities	'	'	'	'
Proceeds from the issuance of common stock and warrants	969,502	226,400	325,716	4,431,618
Proceeds from the exercise of stock options	0	0	0	5,316,250
Proceeds from the exercise of warrants	37,500	0	0	1,557,610
Proceeds from loan financing	0	0	0	1,020,000
Repayment of loan financing	0	0	0	-1,020,000
Net cash provided by financing activities	1,007,002	226,400	325,716	11,305,478
Foreign exchange effect on cash	4,391	2,118	-17,877	-255,307
Net increase (decrease) in cash	306,487	-83,379	66,221	310,615
Cash, beginning of period	134,125	217,504	151,283	129,997
Cash, end of period	440,612	134,125	217,504	440,612
Supplemental disclosure of cash flow information	'	'	'	'
Cash paid during the period for: interest	0	0	0	26,444
Cash paid during the period for: income taxes	0	0	0	0
Non-cash investing and financing activities	'	'	'	'
Receipt of marketable securities for settlement of loan, net	0	0	0	155,343
Accounts payable related to oil and gas properties interests	0	0	0	24,160
Asset retirement obligation	$0	$0	$0	$82,868

1_NATURE_OF_BUSINESS_AND_OPERA

1. NATURE OF BUSINESS AND OPERATIONS	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
NATURE OF BUSINESS AND OPERATIONS	'
	Strata Oil & Gas Inc. (the ‘Company’) is engaged in the exploration for oil and natural gas in oil sands in the Canadian province of Alberta.  The Company was formerly engaged in the development of Knowledge Worker Automation (KWA) software.
	Upon disposal of the Company’s software assets and change in focus to oil and gas exploration, the Company has entered the exploration stage of its new business activity and follows Accounting Standards Codification (“ASC”) 915, Development Stage Enterprises.

2_ABILITY_TO_CONTINUE_AS_A_GOI

2. ABILITY TO CONTINUE AS A GOING CONCERN	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
ABILITY TO CONTINUE AS A GOING CONCERN	'
	The accompanying financial statements have been prepared in US dollars and in accordance with accounting principles generally accepted in the United States on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.  The Company commenced its oil and gas exploration activities in the last quarter of 2005. The Company has not realized any revenue from its present operations. During the year ended December 31, 2013, the Company incurred a loss from continuing operations of $2,798,169. In addition, the Company had negative cash flows from operations of $525,549 and is expected to continue to incur further negative operating cash flows in the foreseeable future.  Since the Company had re-entered the exploration stage, it has an accumulated deficit of $15,914,965 at December 31, 2013. These conditions raise substantial doubt about the Company's ability to continue as a going concern.
	The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable. The Company expects that it will need approximately $525,000 to fund its operations during the next twelve months which will include minimum annual property lease payments, exploration expenditures, as well as operating expenses.  Management has plans to seek additional capital through a private placement and public offering of its common stock. Although there are no assurances that management’s plans will be realized, management believes that the Company will be able to continue operations in the future.  Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern.

3_SIGNIFICANT_ACCOUNTING_POLIC

3. SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

'

SIGNIFICANT ACCOUNTING POLICIES

'

Management’s Estimates and Assumptions

The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended.  Actual results could differ significantly from those estimates

Oil and Gas Property Payments and Exploration Costs

The Company follows the full cost method of accounting for natural gas and oil operations.  Under the full cost method all costs incurred in the acquisition, exploration and development of natural gas and oil reserves are initially capitalized into cost centers on a country-by-country basis. The Company’s current cost center is located in Canada. Such costs include land acquisition costs, geological and geophysical expenditures, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition, exploration and development activities.

Costs capitalized, together with the costs of production equipment, are depleted and amortized on the unit-of-production method based on the estimated net proved reserves, as determined by independent petroleum engineers. The accounting standards require that the average, first-day-of-the-month price during the 12-month period before the end of the year rather than the year-end price, must be used when estimating whether reserve quantities are economical to produce. This same 12-month average price is also used in calculating the aggregate amount of (and changes in) future cash inflows related to the standardized measure of discounted future net cash flows. Costs of acquiring and evaluating unproved properties are initially excluded from depletion calculations. These unevaluated properties are assessed periodically to ascertain whether impairment has occurred. When proved reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to costs subject to depletion calculations.

Under full cost accounting rules, capitalized costs, less accumulated amortization and related deferred income taxes, shall not exceed an amount (the ceiling) equal to the sum of: (i) the after tax present value of estimated future net revenues computed by applying current prices of oil and gas reserves to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on currents costs) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; (ii) the cost of properties not being amortized; and (iii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized.  If unamortized costs capitalized within a cost center, less related deferred income taxes, exceed the ceiling, the excess shall be charged to expense and separately disclosed during the period in which the excess occurs. Amounts thus required to be written off shall not be reinstated for any subsequent increase in the cost center ceiling.

The Company has not recognized any revenue from its oil and gas exploration activities which commenced in the last quarter of 2005.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents. The company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits. There was no cash equivalent balances for the year ended December 31, 2013 (2012 – $Nil).

GST Receivables

GST Receivables are presented net of an allowance for doubtful accounts. Receivables consist of goods and services input tax credits. The allowance was $Nil at both December 31, 2013 and 2012.

Office Equipment

Office equipment is recorded at cost less accumulated depreciation using the straight-line method over the estimated useful lives of the assets which is estimated to be five years.

31-Dec-13

31-Dec-12

Office equipment

$

11,614

$

11,614

Accumulated depreciation

(11,614

)

(11,614

)

Net book value

$

–

$

–

Impairment of Long-lived Assets

In accordance with ASC 360, Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

Asset Retirement Obligations

In accordance with ASC 410, Asset Retirement and Environmental Obligations the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long-lived asset and subsequently allocated to expense using a systematic and rational method. The Company has recorded an asset retirement obligation at December 31, 2013 and 2012 (Note 7) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit-adjusted, risk-free interest rate. At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary. The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed. Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment. The liability accretes until the Company settles the obligation.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If it is determined that the realization of the future tax benefit is not more likely than not, the enterprise establishes a valuation allowance.

Foreign Exchange Translation

The Company's functional currency is the Canadian dollar, but reports its financial statements in US dollars. The Company translates its Canadian dollar balances to US dollars in the following manner: Assets and liabilities have been translated using the rate of exchange at the balance sheet date. The Company’s results of operations have been translated using average rates. Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity.

All amounts included in the accompanying financial statements and footnotes are stated in U.S. dollars.

Derivative Financial Instruments

The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants that may, depending on their terms, be accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed-for-fixed” criteria of ASC 815-40-15. The Company may also issue options or warrants to employees and non-employees in connection with consulting or other services.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option and warrant-based derivative financial instruments, the Company uses the Black-Scholes option pricing model to value the derivative instruments.

The change in the fair value of unvested options issued to non-employees for goods and services which meet the classification of a derivative financial instrument are charged as a compensation expense in consulting fees over the vesting period. Upon vesting, the change in the fair value of vested options to non-employees is charged to consulting fees.

Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued-up to fair value at that date and the fair value of the exercised instrument is then re-classed from liability to additional paid in capital.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Stock Option Plans

The Company has elected to use the Black-Scholes option pricing model to determine the fair value of stock options granted. In accordance with the accounting standard for employees, the compensation expense is amortized on a graded vesting basis over the requisite service period which approximates the vesting period. Compensation expense for stock options granted to non-employees is amortized over the contract services period or, if none exists, from the date of grant until the options vest. Compensation associated with unvested options granted to non-employees is re-measured on each balance sheet date using the Black-Scholes option pricing model.

The expected volatility of options granted has been determined using the methods described under the relevant accounting standard. The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model. For non-employees, the expected term of the options approximates the full term of the options. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The Company has not paid and does not anticipate paying dividends on its common stock; therefore, the expected dividend yield is assumed to be zero. In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period. Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statement of Operations and Comprehensive Income (Loss).

Compensation expense is recognized immediately for past services and pro-rata for future services over the option vesting period. During 2013, the Company recognized $80,080 (2012 - $40,826 expense; 2011 - $3,000) in stock-based compensation expense in the Statement of Operations and Comprehensive Income (Loss) in respect of options granted to non-employees. All stock options granted in 2013, 2012 and 2011 were to non-employees of the Company.

The fair value of each option granted is estimated using the Black-Scholes option-pricing model over the vesting period. During the years ended December 31, 2013, 2012 and 2011 the following weighted average assumptions were used:

2013

2012

2011

Dividend yield

0%

0%

0%

Expected volatility

144.20%

152.60%

106.50%

Risk-free rate

2.77%

1.67%

0.92%

Expected life in years

8.5

10

9

The Company did not issue any stock options during 2013. The weighted average grant date fair value per option in 2013 was $Nil.

Expected volatilities are calculated using the historical volatility of the Company’s stock. When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees termination within the valuation model. For non-employees, the expected term of the options approximates the full term of the options.

Earnings (Loss) Per Share of Common Stock

Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value. The amount of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities. Warrants and options with an exercise price lower than the weighted average share price during the period were determined to be anti-dilutive and excluded from the computation of earnings per share.

At December 31, 2013 and 2012, the effect of all outstanding options and common stock warrants would have been anti-dilutive, due to the net loss incurred and accordingly only basic and diluted earnings per share is the same in 2013 and 2012.

At December 31, 2011, potential common shares of 8,657,486, were not included in diluted earnings per share related to stock options and warrants and were excluded from the computation of diluted earnings per share since their effect was anti-dilutive. See Note 8 for calculation of diluted income per common share.

Fair Value of Financial Instruments

The book values of GST receivables, notes receivable, and accounts payable approximate their respective fair values due to the short-term nature of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:

•

Level one — Quoted market prices in active markets for identical assets or liabilities;

•

Level two — Inputs other than level one inputs that are either directly or indirectly observable; and

•

Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter. Liabilities measured at fair value are summarized as follows as of:

December 31, 2013:

Level 1

Level 2

Level 3

Total

Derivative liability

$

–

$

–

$

5,178,906

$

5,178,906

December 31, 2012:

Level 1

Level 2

Level 3

Total

Derivative liability

$

–

$

–

$

2,342,989

$

2,342,989

We currently measure and report the fair value liability for stock options and warrants with a strike price currency different than the functional currency of the Company on a recurring basis. The fair value liabilities for non-employee stock options and warrants have been recorded as determined utilizing the Black-Scholes option pricing model. See Note 5 for further discussion of the inputs used in determining the fair value.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. The Company's items of other comprehensive income (loss) are foreign currency translation adjustments.

New Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

4_NOTE_RECEIVABLE

4. NOTE RECEIVABLE	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
4. NOTE RECEIVABLE	'
	On December 27, 2013 the Company entered into an unsecured short-term note agreement for $65,814 ($70,000 Canadian) with a third party. The note bears interest at the Bank of Canada prime rate plus 1%. The borrower may repay the entire loan including outstanding interest at any time by advising the Company of the intent to pay fifteen days prior to the anticipated date of retirement. Management expects the note receivable to be paid within one year and has classified the note as a current asset on the balance sheet.

5_DERIVATIVE_LIABILITIES

5. DERIVATIVE LIABILITIES	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
DERIVATIVE LIABILITIES	'
	Derivative liabilities, consisting of the equity instruments such as common share warrants with an exercise price in a different currency than the Company’s functional currency, are accounted for as separate liabilities measured at their respective fair values as follows:
	Balance, December 31, 2010	$	2,004,159
	Fair value of warrants issued in private placements		325,176
	Change in fair value of derivative liabilities		(1,806,379	)
	Foreign exchange effect on derivative liability		(38,719	)
	Balance, December 31, 2011		484,777
	Fair value of warrants issued in private placements		226,400
	Change in fair value of derivative liabilities		1,620,319
	Foreign exchange effect on derivative liability		11,493
	Balance, December 31, 2012		2,342,989
	Fair value of warrants issued in private placements		969,502
	Exercise of warrants – reclassification to additional paid-in-capital		(117,069	)
	Change in fair value of derivative liabilities		2,216,119
	Foreign exchange effect on derivative liability		(232,635	)
	Balance, December 31, 2013	$	5,178,906
	The fair value of the derivative liabilities has been determined using the Black-Scholes option pricing model using the following range of assumptions:
		December 31,		December 31,	December 31,
		2013		2012	2011
	Risk-free interest rate	1.13 to 2.77%		1.21 to 1.80%	0.86 to 0.92%
	Expected life of derivative liability	1 to 10 yrs		2 to 10 yrs	1 to 9 yrs
	Annualized volatility	144.20%		201.40%	106.50%
	Dividend rate	0.00%		0.00%	0.00%

6_OIL_AND_GAS_PROPERTY_INTERES

6. OIL AND GAS PROPERTY INTERESTS	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
OIL AND GAS PROPERTY INTERESTS	'
		2013 (Cumulative)
		Peace River				Drowned			Total
	Property acquisition and lease payments	$	2,656,418			$	39,051		$	2,695,469
	Geological and geophysical		328,727				13,792			342,519
	Project management		880,202							880,202
	Drilling		3,493,340							3,493,340
	Assaying and analysis		93,762							93,762
	Asset retirement obligations		113,550							113,550
	Camp and field supplies		41,433							41,433
	Travel and accommodation		124,573							124,573
	Total expenditures	$	7,732,005			$	52,843		$	7,784,848
		2012 (Cumulative)
		Peace River				Drowned			Total
	Property acquisition and lease payments	$	2,742,821			$	41,663		$	2,784,484
	Geological and geophysical		332,277				14,714			346,991
	Project management		939,085				–			939,085
	Drilling		3,727,034				–			3,727,034
	Assaying and analysis		100,034				–			100,034
	Asset retirement obligations		121,145				–			121,145
	Camp and field supplies		44,205				–			44,205
	Travel and accommodation		132,906				–			3,727,034
	Total expenditures	$	8,139,508			$	56,377		$	8,195,885
	Peace River Property
	The Company has entered into a series of leases in multiple transactions with the Province of Alberta in the Peace River area of Alberta, Canada (the “Peace River Property”).  All of the leases were acquired through a public auction process that requires the Company to submit sealed bids for land packages being auctioned by the provincial government. Upon being notified that it has submitted the highest bid for a specific land parcel the Company immediately pays the government the bid price and enters into a formal lease with the government. All of the leases are for a 15 year term, require minimum annual lease payments, and grant the Company the right to explore for potential oil sands opportunities on the respective lease. The specific transactions entered into by the Company are as noted below.
	Date	Number of		Land Area				Annual Lease Payments
		Leases		(Hectares)
	15-Jun-06	3			4,864			CDN $17,024 / USD $16,066
	19-Oct-06	4			3,584			CDN $12,544 / USD $11,794
	2-Nov-06	4			5,632			CDN $19,712 / USD $18,533
	11-Jan-07	4			4,608			CDN $16,128 / USD $15,164
	24-Jan-07	2			2,304			CDN $8,064 / USD $7,582
		17			20,992			CDN $73,472 / USD $69,078
	Drowned Property
	On September 7, 2005 the Company acquired a 100% interest in an Alberta oil sands lease (the “Drowned Property”).  The rights to the Drowned Property were acquired for $20,635 plus fees and closing costs of $8,150 which were paid. The Property covers 512 hectares of land in the Drowned Area of the Wabasca oil sands in the West Athabasca area of Northern Alberta. The lease, which expires in October 2015, gives the Company the right to explore the Property covered by the lease.  The Company’s acquisition of the lease includes an overriding 4% royalty agreement with the vendor. The royalty is to be paid on a well-to-well basis and is payable on all petroleum.
	substances produced by any well on the Property. The Property is subject to an annual lease payment payable to the government of Alberta in the amount of CDN $1,792 (USD $1,685) until expiry on October 4, 2015. The company can apply for continuation of the leases based on prior exploration and historical findings. The Government of Alberta will review each case on an individual basis, if approved the government will grant an extension, otherwise the lease will expire
	All of the Company’s leases for the Peace River and Drowned Properties are also subject to royalties payable to the government of Alberta. The royalties payable to the government of Alberta is in addition to the royalties payable to the vendor above. The royalty is calculated using a revenue-less-cost formula.  In years prior to the recovery of the project’s capital investment, the royalty is 1% of gross revenue.  Once the project costs have been recovered, the royalty is the greater of 1% of gross revenue or 25% of net revenue.
	The following table sets forth the Company’s future minimum lease payments for both the Peace River and Drowned oil and gas properties for the years ending December 31:
	Year	Future Minimum Lease Payments
	2014	$	70,763
	2015		70,763
	2016		69,078
	2017		69,078
	2018		69,078
	Thereafter		160,902
	Total	$	509,662

7_ASSET_RETIREMENT_OBLIGATIONS

7. ASSET RETIREMENT OBLIGATIONS	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
ASSET RETIREMENT OBLIGATIONS	'
	During 2007, the Company drilled four wells on its Peace River Property.  Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods. The Company has estimated the net present value of its total asset retirement obligations to be approximately $139,623 at December 31, 2013 (2012 - $138,129), based on an undiscounted total future liability of $275,478 (CDN$293,000). These payments are expected to be incurred between 2015 and 2030. The Company used a credit adjusted discount rate of 10% per annum and an inflation rate of 2% to calculate the present value of the asset retirement obligation.  Accretion expense of $10,487 (2012 – $7,500, 2011 - $8,647) has been recorded in the Statements of Operations and Comprehensive Loss at December 31, 2013.

8_RELATED_PARTY_TRANSACTIONS

8. RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
RELATED PARTY TRANSACTIONS	'
	Related party transactions not disclosed elsewhere in these financial statements include:
	Consulting Fees
	Mr. Daems does not bill the Company for his services as President, however a related party by common director has a service agreement with the Company to assist with identification, acquisition and service of certain exploration style properties that fit the parameters of the Company’s acquisition plan. The Company recognized an expense of $53,304 in 2013 in (2012 - $26,582, 2011 - $5,487) as consulting fees under the agreement.
	Directors’ fees
	Directors’ fees of $Nil (2012 and 2011 - $Nil) have been recorded as consulting fees at December 31, 2013.

9_SHARE_CAPITAL

9. SHARE CAPITAL	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
SHARE CAPITAL	'
	On November 15, 2005 the Company closed a private placement of 560,000 units at $0.375 per unit for a total offering price of $210,000. Each unit consisted of one share of the common stock of the Company, one Class A Warrant exercisable for one share of Common Stock at an exercise price of $0.44 for a period of four years commencing on November 15, 2006, and one Class B Warrant exercisable for one share of Common Stock at an exercise price of $0.50 for a period of three years commencing on November 15, 2007. The Company has the right to accelerate the exercise date or reduce the exercise price of the Class A and Class B Warrants.
	On May 9, 2006, at a Special Meeting of the Company’s stockholders, a majority of the Company’s stockholders approved a 2:1 forward stock split. The record and payment dates of the forward split were May 10 and May 11, 2006 respectively. All of the common shares issued and outstanding on May 10, 2006 were split.   All references to share and per share amounts have been restated in these financial statements to reflect the split.
	On June 13, 2006 the Company closed a private placement of 500,000 units at $2.00 per unit for a total offering price of $1,000,000.  Each unit consisted of one share of the common stock of the Company, one Class A Warrant exercisable for one share of Common Stock at an exercise price of $2.125 for a period of four years commencing on June 13, 2007 and one Class B Warrant exercisable for one share of Common Stock at an exercise price of $2.25 for a period of three and one half years commencing on December 13, 2007.  The Company has the right to accelerate the exercise date or reduce the exercise price of the Class A and Class B Warrants.
	On July 13, 2007, at a Special Meeting of the Company’s stockholders, a majority of the Company’s stockholders approved a 2:1 forward stock split. The record and payment dates of the forward split were October 8 and October 9, 2007 respectively. All of the common shares issued and outstanding on October 8, 2007 were split.   All references to share and per share amounts have been restated in these financial statements to reflect the split.
	On January 9, 2008, 320,000 common share warrants were exercised at an exercise price of $0.1875 for total proceeds of $60,000.
	On January 28, 2008, the Company closed a private placement of 1,700,000 common shares at $1.00 per share for total proceeds of $1,700,000.
	On June 19, 2009, 100,000 common share warrants were exercised at an exercise price of $0.20 for total proceeds of $20,000. Upon exercise, the fair value of this liability instrument at this date of $39,890 was re-classified from liability to additional paid in capital.
	On July 07, 2009, 1,550,000 common share warrants were exercised at an exercise price of $0.1250 for total proceeds of $193,750. Upon exercise, the fair value of this liability instrument at this date of $598,525 was re-classified from liability to additional paid in capital.
	On November 17, 2009, 1,600,000 common share warrants were exercised at an exercise price of $0.1250 for total proceeds of $200,000. Upon exercise, the fair value of this liability instrument at this date of $658,010 was re-classified from liability to additional paid in capital.
	On March 3, 2010, 888,890 common share warrants were exercised at an exercise price of $0.11 for total proceeds of $100,000.  Upon exercise, the fair value of this liability instrument at this date of $321,689 was re-classified from liability to additional paid in capital. See Note 5.
	On March 18, 2010, 844,445 common share warrants were exercised at exercise prices ranging from $0.1125 to $0.19 for total proceeds of $100,000. Upon exercise, the fair value of this liability instrument at this date of $300,445 was re-classified from liability to additional paid in capital. See Note 5.
	On January 06, 2011, the Company closed a private placement for a total of 1,000,000 units at $0.10 per unit for total offering price of $100,000.  Each unit consisted of one share of the common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.15 for a period of four years commencing on January 25, 2012 and expiring on January 25, 2016.
	On March 30, 2011, the Company closed two private placements for a total of 625,000 units at $0.16 per unit for a total offering price of $100,000. Each unit consisted of one share of the common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.24 for a period of four years commencing on March 30, 2012 and expiring on March 30, 2016.
	On May 17, 2011, the Company closed a private placement for a total of 714,286 units at $0.14 per unit for a total offering price of $100,000.  Each unit consisted of one share of the common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.21 for a period of four years commencing on May 17, 2012 and expiring on May 17, 2016.
	On August 12, 2011, the Company closed a private placement for a total of 208,334 units at $0.12 per unit for a total offering price of $25,000.  Each unit consisted of one share of the common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.18 for a period of four years commencing on August 12, 2012 and expiring on August 12, 2016.
	The Company classified the entire proceeds of $325,716 from private placements closed in 2011 as a derivative liability related to the warrants.
	On August 6, 2012, the Company closed two private placements for a total of 1,250,000 units at $0.04 per unit for an aggregate total offering price of $50,000. Each unit consisted of one share of common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.06 for a period of four years commencing on August 6, 2013 and expiring on August 6, 2017.
	On August 6, 2012, the Company closed a private placement for a total of 2,500,000 units at $0.04 per unit for a total offering price of $100,000. Each unit consisted of one share of common stock of the Company also with one Class A, once Class B and one Class C Warrant, each exercisable for one share of common stock at an exercise price of $0.10, $0.20 and $0.30 commencing on August 6, 2013, 2014 and 2015 and expiring on August 6, 2022.
	On August 20, 2012, the Company closed a private placement for a total of 625,000 units at $0.04 per unit for a total offering price of $25,000. Each unit consisted of one share of common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.06 for a period of four years commencing on August 20, 2013 and expiring on August 20, 2017.
	On September 19, 2012, the Company closed a private placement for a total of 416,667 units at $0.06 per unit for a total offering price of $25,000. Each unit consisted of one share of common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.09 for a period of four years commencing on September 19, 2013 and expiring on September 19, 2017.
	On October 26, 2012, the Company closed a private placement for a total of 440,000 units at $0.06 per unit for a total offering price of $26,400. Each unit consisted of one share of common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.09 for a period of four years commencing on October 26, 2013 and expiring on October 26, 2017.
	The Company classified the entire proceeds of $226,400 from private placements closed in 2012 as a derivative liability related to the warrants.
	For the year ended December 31, 2013, the Company closed a series of private placements totaling 8,397,296 units at $0.08 to $0.24 per unit for total offering proceeds of $804,502. Each unit consisted of one share of common stock of the Company and one Class A Warrant exercisable for one share of common stock at an exercise price of $0.12 to $0.32 for a period of four years commencing one year after the placements closed.
	On May 13, 2013 the Company closed a private placement totaling 1,250,000 units at $0.08 per unit for a total offering price of $100,000. Each unit consisted of one share of common stock and one Class A Warrant with an exercise price of $0.10, one Class B Warrant with an exercise price of $0.20 and one Class C Warrant with an exercise price of $0.30. Each warrant is exercisable for one share of common stock and expires on May 13, 2023.
	On August 26, 2013 the Company closed a private placement totaling 812,500 units at $0.08 per unit for a total offering price of $65,000. Each unit consisted of one share of common stock, one Class A Warrant with an exercise price of $0.12 and one Class B Warrant with an exercise price of $0.18. Each warrant is exercisable for one share of common stock and expires on August 26, 2018
	The Company classified the entire proceeds of $969,502 from private placements closed in 2013 as a derivative liability related to the warrants.
	On December 11, 2013, 625,000 common share warrants were exercised at exercise prices of $0.06 for total proceeds of $37,500. Upon exercise, the fair value of this liability instrument at this date of $117,069 was re-classified from liability to additional paid in capital. See Note 5.
	Earnings per share
	Basic income per common share is computed by dividing income available to the Company’s common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share reflects the potential dilution that could occur from common share issuable through stock options and warrants. Diluted income per common share is computed similarly to basic income per common stock except that weighted average common stock is increased to include the potential issuance of dilutive common stock.
		2013			2012			2011
	Net income (loss) for the year	$	(2,798,169	)	$	(1,856,790	)	$	1,629,255
	Weighted average common stock basic		80,057,824			71,340,773			68,847,251
	Effect of options		–			–			8,128
	Effect of warrants		–			–			330,072
	Diluted		80,057,824			71,340,773			69,185,451
	At December 31, 2013 and 2012, the effect of the Company’s outstanding options and warrants would have been anti-dilutive. Accordingly, only basic income per common share is presented for 2013 and 2012.

10_STOCK_OPTION_PLANS

10. STOCK OPTION PLANS	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
STOCK OPTION PLANS	'
	In June 2006 the stockholders approved and the Company adopted its 2006 Stock Option Plan (“the 2006 Plan”).  The 2006 Plan provides for the granting of up to 8,000,000 stock options to key employees, directors and consultants, of common shares of the Company.  Under the 2006 Plan, the granting of incentive and non-qualified stock options, exercise prices and terms are determined by the Company's Option Committee, a committee designated to administer the 2006 Plan by the Board of Directors. For incentive options, the exercise price shall not be less than the fair market value of the Company's common stock on the grant date. (In the case of options granted to an employee who owns stock possessing more than 10% of the voting power of all classes of the Company's stock on the date of grant, the option price must not be less than 110% of the fair market value of common stock on the grant date.)  Options granted are not to exceed terms beyond ten years (five years in the case of an incentive stock option granted to a holder of 10 percent of the Company's common stock).
	Activity under the 2006 Plan is summarized as follows:
		Available for Grant			Options			Weighted Average
					Outstanding			Exercise Price
	Balance, December 31, 2010		6,100,000			600,000		$	1.14
	Cancelled		–			–			–
	Granted		–			–			–
	Balance, December 31, 2011		6,100,000			600,000			1.14
	Granted		(1,400,000	)		1,400,000			0.16
	Cancelled		–			–			–
	Balance, December 31, 2012		4,700,000			2,000,000			0.46
	Granted		–			–			–
	Forfeited		1,000,000			(1,000,000	)		0.17
	Balance, December 31, 2013		5,700,000			1,000,000		$	0.73
	Balance exercisable, December 31, 2013					800,000		$	0.88
	The following table summarizes information concerning outstanding and exercisable common stock options under the 2006 Plan at December 31, 2013:
	Range of	Number of			Remaining			Weighted		Number of
	Exercise	Options			Contractual			Average		Options
	Prices	Outstanding			Life			Exercise		Currently
					(in Years)			Price		Exercisable
	$0.07		200,000			8.53		$0.07			200,000
	$0.13		25,000			6.82		$0.13			25,000
	$0.14		200,000			8.53		$0.14			–
	$0.20		25,000			6.82		$0.20			25,000
	$0.40		25,000			6.82		$0.40			25,000
	$0.60		25,000			6.82		$0.60			25,000
	$0.61		200,000			3.25		$0.61			200,000
	$0.74		100,000			4.58		$0.74			100,000
	$2.29		200,000			2.56		$2.29			200,000
			1,000,000								800,000
	The aggregate intrinsic value of stock options outstanding at December 31, 2013 was $31,250 (2012 - $17,000, 2011 - $Nil) while the aggregate intrinsic value of stock options exercisable at December 31, 2013 was $23,250 (2012 - $Nil, 2011 - $Nil). No stock options were exercised in 2013, 2012, or 2011.
	The following table summarizes information concerning unvested common stock options under the 2006 Plan at December 31, 2013:
		Number of			Weighted			Weighted Average
		Unvested Options			Average			Grant Date Fair
					Exercise			Value
					Price
	Unvested at December 31, 2011		50,000		$	0.13		$	0.37
	Granted		1,400,000			0.16			0.07
	Vested		(25,000	)		0.4			0.12
	Unvested at December 31, 2012		1,425,000		$	0.17		$	0.07
	Vested		(225,000	)		0.13			0.07
	Forfeited		(1,000,000	)		0.14			0.07
	Unvested at December 31, 2013		200,000		$	0.14		$	0.11
	As of December 31, 2013, there was $12,016 (2012 – $115,900, 2011 - $5,605) of total unrecognized compensation cost related to all unvested options granted and outstanding. This unrecognized compensation cost is expected to be recognized over a weighted average period of approximately 1 year.
	During the year ended December 31, 2013, the Company recorded consulting fees of $80,080 (2012 – $40,826; 2011 – $3,000) in the statement of operations related to stock options granted to non-employees during the year.
	The Company issues new shares when options are exercised.

11_WARRANTS

11. WARRANTS	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
WARRANTS	'
	Issued	Warrants			Weighted Average Exercise Price
	Balance, December 31, 2010		13,866,265		$	0.35
	Warrants issued		2,547,620			0.19
	Balance, December 31, 2011		16,413,885			0.23
	Warrants issued		10,231,667			0.1
	Warrants forfeited		(3,395,555	)		0.23
	Balance, December 31, 2012		23,249,997			0.27
	Warrants issued		13,772,296			0.16
	Warrants exercised		(625,000	)		0.06
	Warrants forfeited		(500,000	)		2.19
	Balance, December 31, 2013		35,897,293		$	0.2
	The following table lists the common share warrants outstanding at December 31, 2013.  Each warrant is exchangeable for one common share.
	Number Outstanding	Number Vested			Average		Expiry Year
					Exercise Price
	7,020,710		7,020,710		$0.20		2014
	2,950,000		2,950,000		$0.53		2015
	2,547,620		2,547,620		$0.19		2016
	2,106,668		2,106,667		$0.07		2017
	10,022,296		–		$0.14		2018
	7,500,000		7,500,000		$0.20		2022
	3,750,000		–		$0.20		2023
	35,897, 294		22,124,997		$0.20
	* On October 23, 2012 the Board of Directors resolved to offer an extension to the exercise period for certain warrants for a period of up to 2 years from their original expiration date. The warrant holders who completed the warrant extension agreement had the expiration date extended as specified in the agreement. Warrant holders that did not elect to have their warrants extended were forfeited. There was no additional cost associated with the extension as the change in the value of the warrants is recognized through the change in the fair value of the derivative liability on the face of the statements of operations.

12_INCOME_TAXES

12. INCOME TAXES	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
INCOME TAXES	'
	The tax effects of temporary differences that give rise to the Company’s deferred tax assets are as follows:
		2013			2012
	Deferred tax assets (liabilities)
	Net operating loss carry-forwards	$	1,124,700		$	1,009,000
	Capital losses		5,000			5,000
	Office equipment		12,500			12,500
	Oil and gas properties		281,000			281,000
	Asset retirement obligation		52,300			41,500
			1,475,500			1,349,000
	Valuation allowance		(1,475,500	)		(1,349,000	)
	Net deferred tax asset	$	–		$	–
	Upon continuation to Canada in 2004, all losses carried forward at that time expired. As of December 31, 2013, the Company had available to offset future taxable income and net Canadian operating loss carry-forwards of approximately $4.5 million. The carry-forwards will begin expiring in 2014 unless utilized in earlier years. The Company also has approximately $9.0 million in Canadian oil and gas dedication pools that can be used to offset income of future periods.
	The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and this causes a change in management's judgment about the recoverability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current income. During the years ended December 31, 2013, 2012 and 2011, changes in valuation allowance was $126,500, $54,500 and $56,500, respectively.
	The (benefit) provision for income taxes differs from the amount of income tax determined by applying the applicable Canadian statutory federal income tax rate to pre-tax loss as a result of the following differences:
		2013			2012			2011
	Statutory federal income tax rate		(23%	)		(25%	)		(27%	)
	Change in valuation allowance		(9%	)		(5%	)		(5%	)
	Non-deductible stock-based compensation		3%			1%			2%
	Non-deductible change in fair value of derivative Liability		32%			30%			30%
	Effect of foreign exchange		(1%	)		1%			2%
	Effect of reduction in income tax rate		(2%	)		(2%	)		(2%	)
			-%			-%			-%
	The Company has evaluated its tax positions for the years ended December 31, 2013, 2012 and 2011 and determined that it has no uncertain tax positions requiring financial statement recognition.
	Under ASC 740-10-25, the impact of an uncertain income tax position on income tax expense must be recognized at the largest amount that is more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has 50% or less likelihood of being sustained.
	We accrue interest and penalties on our uncertain tax positions as a component of our provision for income taxes. There was no amount of interest and penalties recognized as an expense during 2013 or 2012.
	Our income tax returns are generally considered closed to examination when we file a notice of determination with the taxing authority. No such notice has been filed to date.

13_COMMITMENTS_AND_CONTINGENCI

13. COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
COMMITMENTS AND CONTINGENCIES	'
	Environmental Matters
	The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas. Should it be determined that a liability exists with respect to any environmental clean up or restoration, the liability to cure such a violation could fall upon the Company. No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean-up, restoration or the violation of any rules or regulations relating thereto. Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable and the costs can be reasonably estimated.

14_SUBSEQUENT_EVENTS

14. SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
SUBSEQUENT EVENTS	'
	Subsequent to the 2013 year end the Company closed a series of private placements for a total of 487,578 units for an aggregate total offering price of $80,600 USD. Each unit consisted of one share of common stock of the Company and one Class A Warrant exercisable, beginning on the one year anniversary date of the placement, for one share of common stock for a period of four years and expiring in 2019.

3_SIGNIFICANT_ACCOUNTING_POLIC1

3. SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2013

Significant Accounting Policies Policies

'

Managements Estimates and Assumptions

'

The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended.  Actual results could differ significantly from those estimates

Oil and Gas Property Payments and Exploration Costs

'

The Company follows the full cost method of accounting for natural gas and oil operations.  Under the full cost method all costs incurred in the acquisition, exploration and development of natural gas and oil reserves are initially capitalized into cost centers on a country-by-country basis. The Company’s current cost center is located in Canada. Such costs include land acquisition costs, geological and geophysical expenditures, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition, exploration and development activities.

Costs capitalized, together with the costs of production equipment, are depleted and amortized on the unit-of-production method based on the estimated net proved reserves, as determined by independent petroleum engineers. The accounting standards require that the average, first-day-of-the-month price during the 12-month period before the end of the year rather than the year-end price, must be used when estimating whether reserve quantities are economical to produce. This same 12-month average price is also used in calculating the aggregate amount of (and changes in) future cash inflows related to the standardized measure of discounted future net cash flows. Costs of acquiring and evaluating unproved properties are initially excluded from depletion calculations. These unevaluated properties are assessed periodically to ascertain whether impairment has occurred. When proved reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to costs subject to depletion calculations.

Under full cost accounting rules, capitalized costs, less accumulated amortization and related deferred income taxes, shall not exceed an amount (the ceiling) equal to the sum of: (i) the after tax present value of estimated future net revenues computed by applying current prices of oil and gas reserves to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on currents costs) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; (ii) the cost of properties not being amortized; and (iii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized.  If unamortized costs capitalized within a cost center, less related deferred income taxes, exceed the ceiling, the excess shall be charged to expense and separately disclosed during the period in which the excess occurs. Amounts thus required to be written off shall not be reinstated for any subsequent increase in the cost center ceiling.

The Company has not recognized any revenue from its oil and gas exploration activities which commenced in the last quarter of 2005.

Cash and Cash Equivalents

'

The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents. The company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits. There was no cash equivalent balances for the year ended December 31, 2013 (2012 – $Nil).

GST Receivables

'

GST Receivables are presented net of an allowance for doubtful accounts. Receivables consist of goods and services input tax credits. The allowance was $Nil at both December 31, 2013 and 2012.

Office Equipment

'

Office equipment is recorded at cost less accumulated depreciation using the straight-line method over the estimated useful lives of the assets which is estimated to be five years.

31-Dec-13

31-Dec-12

Office equipment

$

11,614

$

11,614

Accumulated depreciation

(11,614

)

(11,614

)

Net book value

$

–

$

–

Impairment of Long-lived Assets

'

In accordance with ASC 360, Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

Asset Retirement Obligations

'

In accordance with ASC 410, Asset Retirement and Environmental Obligations the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long-lived asset and subsequently allocated to expense using a systematic and rational method. The Company has recorded an asset retirement obligation at December 31, 2013 and 2012 (Note 7) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit-adjusted, risk-free interest rate. At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary. The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed. Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment. The liability accretes until the Company settles the obligation.

Income Taxes

'

The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If it is determined that the realization of the future tax benefit is not more likely than not, the enterprise establishes a valuation allowance.

Foreign Exchange Translation

'

The Company's functional currency is the Canadian dollar, but reports its financial statements in US dollars. The Company translates its Canadian dollar balances to US dollars in the following manner: Assets and liabilities have been translated using the rate of exchange at the balance sheet date. The Company’s results of operations have been translated using average rates. Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity.

All amounts included in the accompanying financial statements and footnotes are stated in U.S. dollars.

Derivative Financial Instruments

'

The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants that may, depending on their terms, be accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed-for-fixed” criteria of ASC 815-40-15. The Company may also issue options or warrants to employees and non-employees in connection with consulting or other services.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option and warrant-based derivative financial instruments, the Company uses the Black-Scholes option pricing model to value the derivative instruments.

The change in the fair value of unvested options issued to non-employees for goods and services which meet the classification of a derivative financial instrument are charged as a compensation expense in consulting fees over the vesting period. Upon vesting, the change in the fair value of vested options to non-employees is charged to consulting fees.

Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued-up to fair value at that date and the fair value of the exercised instrument is then re-classed from liability to additional paid in capital.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Stock Option Plans

'

The Company has elected to use the Black-Scholes option pricing model to determine the fair value of stock options granted. In accordance with the accounting standard for employees, the compensation expense is amortized on a graded vesting basis over the requisite service period which approximates the vesting period. Compensation expense for stock options granted to non-employees is amortized over the contract services period or, if none exists, from the date of grant until the options vest. Compensation associated with unvested options granted to non-employees is re-measured on each balance sheet date using the Black-Scholes option pricing model.

The expected volatility of options granted has been determined using the methods described under the relevant accounting standard. The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model. For non-employees, the expected term of the options approximates the full term of the options. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The Company has not paid and does not anticipate paying dividends on its common stock; therefore, the expected dividend yield is assumed to be zero. In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period. Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statement of Operations and Comprehensive Income (Loss).

Compensation expense is recognized immediately for past services and pro-rata for future services over the option vesting period. During 2013, the Company recognized $80,080 (2012 - $40,826 expense; 2011 - $3,000) in stock-based compensation expense in the Statement of Operations and Comprehensive Income (Loss) in respect of options granted to non-employees. All stock options granted in 2013, 2012 and 2011 were to non-employees of the Company.

The fair value of each option granted is estimated using the Black-Scholes option-pricing model over the vesting period. During the years ended December 31, 2013, 2012 and 2011 the following weighted average assumptions were used:

2013

2012

2011

Dividend yield

0%

0%

0%

Expected volatility

144.20%

152.60%

106.50%

Risk-free rate

2.77%

1.67%

0.92%

Expected life in years

8.5

10

9

The Company did not issue any stock options during 2013. The weighted average grant date fair value per option in 2013 was $Nil.

Expected volatilities are calculated using the historical volatility of the Company’s stock. When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees termination within the valuation model. For non-employees, the expected term of the options approximates the full term of the options.

Earnings (Loss) Per Share of Common Stock

'

Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value. The amount of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities. Warrants and options with an exercise price lower than the weighted average share price during the period were determined to be anti-dilutive and excluded from the computation of earnings per share.

At December 31, 2013 and 2012, the effect of all outstanding options and common stock warrants would have been anti-dilutive, due to the net loss incurred and accordingly only basic and diluted earnings per share is the same in 2013 and 2012.

At December 31, 2011, potential common shares of 8,657,486, were not included in diluted earnings per share related to stock options and warrants and were excluded from the computation of diluted earnings per share since their effect was anti-dilutive. See Note 8 for calculation of diluted income per common share.

Fair Value of Financial Instruments

'

The book values of GST receivables, notes receivable, and accounts payable approximate their respective fair values due to the short-term nature of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:

•

Level one — Quoted market prices in active markets for identical assets or liabilities;

•

Level two — Inputs other than level one inputs that are either directly or indirectly observable; and

•

Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter. Liabilities measured at fair value are summarized as follows as of:

December 31, 2013:

Level 1

Level 2

Level 3

Total

Derivative liability

$

–

$

–

$

5,178,906

$

5,178,906

December 31, 2012:

Level 1

Level 2

Level 3

Total

Derivative liability

$

–

$

–

$

2,342,989

$

2,342,989

We currently measure and report the fair value liability for stock options and warrants with a strike price currency different than the functional currency of the Company on a recurring basis. The fair value liabilities for non-employee stock options and warrants have been recorded as determined utilizing the Black-Scholes option pricing model. See Note 5 for further discussion of the inputs used in determining the fair value.

Comprehensive Income (Loss)

'

Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. The Company's items of other comprehensive income (loss) are foreign currency translation adjustments.

New Accounting Pronouncements

'

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3_SIGNIFICANT_ACCOUNTING_POLIC2

3. SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2013
Significant Accounting Policies Tables	'
Office equipment	'
		31-Dec-13			31-Dec-12
	Office equipment	$	11,614		$	11,614
	Accumulated depreciation		(11,614	)		(11,614	)
	Net book value	$	–		$	–
Stock Option Plans	'
		2013			2012			2011
	Dividend yield		0%			0%			0%
	Expected volatility		144.20%			152.60%			106.50%
	Risk-free rate		2.77%			1.67%			0.92%
	Expected life in years		8.5			10			9
Liabilities measured at fair value	'
	December 31, 2013:
		Level 1			Level 2			Level 3		Total
	Derivative liability	$	–		$	–		$	5,178,906	$	5,178,906
	December 31, 2012:
		Level 1			Level 2			Level 3		Total
	Derivative liability	$	–		$	–		$	2,342,989	$	2,342,989

5_DERIVATIVE_LIABILITIES_Table

5. DERIVATIVE LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2013
Derivative Liabilities Tables	'
Derivative liabilities	'
	Balance, December 31, 2010	$	2,004,159
	Fair value of warrants issued in private placements		325,176
	Change in fair value of derivative liabilities		(1,806,379	)
	Foreign exchange effect on derivative liability		(38,719	)
	Balance, December 31, 2011		484,777
	Fair value of warrants issued in private placements		226,400
	Change in fair value of derivative liabilities		1,620,319
	Foreign exchange effect on derivative liability		11,493
	Balance, December 31, 2012		2,342,989
	Fair value of warrants issued in private placements		969,502
	Exercise of warrants – reclassification to additional paid-in-capital		(117,069	)
	Change in fair value of derivative liabilities		2,216,119
	Foreign exchange effect on derivative liability		(232,635	)
	Balance, December 31, 2013	$	5,178,906
Fair value of the derivative liabilities	'
		December 31,		December 31,	December 31,
		2013		2012	2011
	Risk-free interest rate	1.13 to 2.77%		1.21 to 1.80%	0.86 to 0.92%
	Expected life of derivative liability	1 to 10 yrs		2 to 10 yrs	1 to 9 yrs
	Annualized volatility	144.20%		201.40%	106.50%
	Dividend rate	0.00%		0.00%	0.00%

6_OIL_AND_GAS_PROPERTY_INTERES1

6. OIL AND GAS PROPERTY INTERESTS (Tables)	12 Months Ended
	Dec. 31, 2013
OIL AND GAS PROPERTY INTERESTS	'
		2013 (Cumulative)
		Peace River				Drowned			Total
	Property acquisition and lease payments	$	2,656,418			$	39,051		$	2,695,469
	Geological and geophysical		328,727				13,792			342,519
	Project management		880,202							880,202
	Drilling		3,493,340							3,493,340
	Assaying and analysis		93,762							93,762
	Asset retirement obligations		113,550							113,550
	Camp and field supplies		41,433							41,433
	Travel and accommodation		124,573							124,573
	Total expenditures	$	7,732,005			$	52,843		$	7,784,848
		2012 (Cumulative)
		Peace River				Drowned			Total
	Property acquisition and lease payments	$	2,742,821			$	41,663		$	2,784,484
	Geological and geophysical		332,277				14,714			346,991
	Project management		939,085				–			939,085
	Drilling		3,727,034				–			3,727,034
	Assaying and analysis		100,034				–			100,034
	Asset retirement obligations		121,145				–			121,145
	Camp and field supplies		44,205				–			44,205
	Travel and accommodation		132,906				–			3,727,034
	Total expenditures	$	8,139,508			$	56,377		$	8,195,885
PeaceRiverProperty [Member]	'
Future Minimum annual lease payments	'
	Date	Number of		Land Area				Annual Lease Payments
		Leases		(Hectares)
	15-Jun-06	3			4,864			CDN $17,024 / USD $16,066
	19-Oct-06	4			3,584			CDN $12,544 / USD $11,794
	2-Nov-06	4			5,632			CDN $19,712 / USD $18,533
	11-Jan-07	4			4,608			CDN $16,128 / USD $15,164
	24-Jan-07	2			2,304			CDN $8,064 / USD $7,582
		17			20,992			CDN $73,472 / USD $69,078
DrownedProperty [Member]	'
Future Minimum annual lease payments	'
	Year	Future Minimum Lease Payments
	2014	$	70,763
	2015		70,763
	2016		69,078
	2017		69,078
	2018		69,078
	Thereafter		160,902
	Total	$	509,662

9_SHARE_CAPITAL_Tables

9. SHARE CAPITAL (Tables)	12 Months Ended
	Dec. 31, 2013
Share Capital Tables	'
Earnings per share	'
		2013			2012			2011
	Net income (loss) for the year	$	(2,798,169	)	$	(1,856,790	)	$	1,629,255
	Weighted average common stock basic		80,057,824			71,340,773			68,847,251
	Effect of options		–			–			8,128
	Effect of warrants		–			–			330,072
	Diluted		80,057,824			71,340,773			69,185,451

10_STOCK_OPTION_PLANS_Tables

10. STOCK OPTION PLANS (Tables)	12 Months Ended
	Dec. 31, 2013								Dec. 31, 2012
									Plan 2006
Stock Option Activity	'								'
										Available for Grant			Options			Weighted Average
													Outstanding			Exercise Price
									Balance, December 31, 2010		6,100,000			600,000		$	1.14
									Cancelled		–			–			–
									Granted		–			–			–
									Balance, December 31, 2011		6,100,000			600,000			1.14
									Granted		(1,400,000	)		1,400,000			0.16
									Cancelled		–			–			–
									Balance, December 31, 2012		4,700,000			2,000,000			0.46
									Granted		–			–			–
									Forfeited		1,000,000			(1,000,000	)		0.17
									Balance, December 31, 2013		5,700,000			1,000,000		$	0.73
									Balance exercisable, December 31, 2013					800,000		$	0.88
Outstanding and exercisable common stock options	'								'
									Range of	Number of			Remaining			Weighted		Number of
									Exercise	Options			Contractual			Average		Options
									Prices	Outstanding			Life			Exercise		Currently
													(in Years)			Price		Exercisable
									$0.07		200,000			8.53		$0.07			200,000
									$0.13		25,000			6.82		$0.13			25,000
									$0.14		200,000			8.53		$0.14			–
									$0.20		25,000			6.82		$0.20			25,000
									$0.40		25,000			6.82		$0.40			25,000
									$0.60		25,000			6.82		$0.60			25,000
									$0.61		200,000			3.25		$0.61			200,000
									$0.74		100,000			4.58		$0.74			100,000
									$2.29		200,000			2.56		$2.29			200,000
											1,000,000								800,000
Unvested common stock options	'								'
		Number of			Weighted		Weighted Average
		Unvested Options			Average		Grant Date Fair
					Exercise		Value
					Price
	Unvested at December 31, 2011		50,000		$	0.13	$	0.37
	Granted		1,400,000			0.16		0.07
	Vested		(25,000	)		0.4		0.12
	Unvested at December 31, 2012		1,425,000		$	0.17	$	0.07
	Vested		(225,000	)		0.13		0.07
	Forfeited		(1,000,000	)		0.14		0.07
	Unvested at December 31, 2013		200,000		$	0.14	$	0.11

11_WARRANTS_Tables

11. WARRANTS (Tables)	12 Months Ended
	Dec. 31, 2013
Warrants Tables	'
WARRANTS	'
	Issued	Warrants			Weighted Average Exercise Price
	Balance, December 31, 2010		13,866,265		$	0.35
	Warrants issued		2,547,620			0.19
	Balance, December 31, 2011		16,413,885			0.23
	Warrants issued		10,231,667			0.1
	Warrants forfeited		(3,395,555	)		0.23
	Balance, December 31, 2012		23,249,997			0.27
	Warrants issued		13,772,296			0.16
	Warrants exercised		(625,000	)		0.06
	Warrants forfeited		(500,000	)		2.19
	Balance, December 31, 2013		35,897,293		$	0.2
Warrants outstanding	'
	Number Outstanding	Number Vested			Average		Expiry Year
					Exercise Price
	7,020,710		7,020,710		$0.20		2014
	2,950,000		2,950,000		$0.53		2015
	2,547,620		2,547,620		$0.19		2016
	2,106,668		2,106,667		$0.07		2017
	10,022,296		–		$0.14		2018
	7,500,000		7,500,000		$0.20		2022
	3,750,000		–		$0.20		2023
	35,897, 294		22,124,997		$0.20

12_INCOME_TAXES_Tables

12. INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2013
Income Taxes Tables	'
Deferred tax assets	'
		2013			2012
	Deferred tax assets (liabilities)
	Net operating loss carry-forwards	$	1,124,700		$	1,009,000
	Capital losses		5,000			5,000
	Office equipment		12,500			12,500
	Oil and gas properties		281,000			281,000
	Asset retirement obligation		52,300			41,500
			1,475,500			1,349,000
	Valuation allowance		(1,475,500	)		(1,349,000	)
	Net deferred tax asset	$	–		$	–
(Benefit) provision for income taxes	'
		2013			2012			2011
	Statutory federal income tax rate		(23%	)		(25%	)		(27%	)
	Change in valuation allowance		(9%	)		(5%	)		(5%	)
	Non-deductible stock-based compensation		3%			1%			2%
	Non-deductible change in fair value of derivative Liability		32%			30%			30%
	Effect of foreign exchange		(1%	)		1%			2%
	Effect of reduction in income tax rate		(2%	)		(2%	)		(2%	)
			-%			-%			-%

2_ABILITY_TO_CONTINUE_AS_A_GOI1

2. ABILITY TO CONTINUE AS A GOING CONCERN (Details Narrative) (USD $)	12 Months Ended			102 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Notes to Financial Statements	'	'	'	'
Loss from continuing operations	$2,798,169	$1,856,790	($1,629,255)	$16,037,720
Cash flows from operations	-525,549	-190,894	-171,862	-2,851,236
Accumulated deficit	($2,748,790)	($2,748,790)	'	($2,748,790)

3_SIGNIFICANT_ACCOUNTING_POLIC3

3. SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Notes to Financial Statements	'	'
Office equipment	$11,614	$11,614
Accumulated depreciation	-11,614	-11,614
Net book value	$0	$0

3_SIGNIFICANT_ACCOUNTING_POLIC4

3. SIGNIFICANT ACCOUNTING POLICIES (Details 1)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Notes to Financial Statements	'	'	'
Dividend yield	0.00%	0.00%	0.00%
Expected volatility	144.20%	152.60%	106.50%
Risk-free rate	2.77%	1.67%	0.92%
Expected life in years	'8 years 6 months	'10 years	'9 years

3_SIGNIFICANT_ACCOUNTING_POLIC5

3. SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Derivative liability	$5,178,906	$2,342,989	$484,777	$2,004,159
Level 1 [Member]	'	'	'	'
Derivative liability	'	'	'	'
Level 2 [Member]	'	'	'	'
Derivative liability	'	'	'	'
Level 3 [Member]	'	'	'	'
Derivative liability	$5,178,906	$2,342,989	'	'

3_SIGNIFICANT_ACCOUNTING_POLIC6

3. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	12 Months Ended					102 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2013
Notes to Financial Statements	'	'	'	'	'	'
Cash equivalent balances	$0	$0	'	'	'	$0
Receivables allowance	0	0	'	'	'	0
Stock option expense for consulting fees	$80,080	$40,826	$3,000	$4,775	$94,164	$8,774,945
Weighted average grant date fair value per option	$0.07	$0.07	$0	'	'	'
Potential common shares	'	7,813,372	8,657,486	'	'	'

5_DERIVATIVE_LIABILITIES_Detai

5. DERIVATIVE LIABILITIES (Details) (USD $)	6 Months Ended	12 Months Ended						102 Months Ended
	Dec. 31, 2005	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2006	Dec. 31, 2013
Notes to Financial Statements	'	'	'	'	'	'	'	'
Derivative liability	'	$2,342,989	$484,777	$2,004,159	'	'	'	'
Re-classification to common stock on exercise of warrants	1,691,671	'	'	'	94,730	-120,151	6,746,118	'
Re-classification to additional paid-in capital on cancellation of options	'	-117,069	-117,985	'	'	'	'	'
Fair value of warrants issued in private placements	'	969,502	226,400	325,176	'	'	'	'
Foreign exchange effect on derivative liability	'	-232,635	11,493	-38,719	'	'	'	'
Change in fair value of derivative liability	'	2,216,119	1,620,319	-1,806,379	'	'	'	3,765,994
Derivative liability	'	$5,178,906	$2,342,989	$484,777	'	'	'	$5,178,906

5_DERIVATIVE_LIABILITIES_Detai1

5. DERIVATIVE LIABILITIES (Details 1)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Annualized volatility	144.20%	201.40%	106.50%
Dividend rate	0.00%	'	0.00%
Minimum [Member]	'	'	'
Risk-free interest rate	1.13%	1.21%	0.86%
Expected life of derivative liability	'1 year	'2 years	'1 year
Maximum [Member]	'	'	'
Risk-free interest rate	2.77%	1.80%	0.92%
Expected life of derivative liability	'10 years	'10 years	'9 years

6_OIL_AND_GAS_PROPERTY_INTERES2

6. OIL AND GAS PROPERTY INTERESTS (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Property acquisition and lease payments	$2,695,469	$2,784,484
Geological and geophysical	342,519	346,991
Project management	880,202	939,085
Drilling	3,493,340	3,727,034
Assaying and analysis	93,762	100,034
Asset retirement obligations	113,550	121,145
Camp and field supplies	41,433	44,205
Travel and accommodation	124,573	3,727,034
Total expenditures	7,784,848	8,195,885
PeaceRiverProperty [Member]	'	'
Property acquisition and lease payments	2,656,418	2,742,821
Geological and geophysical	328,727	332,277
Project management	880,202	939,085
Drilling	3,493,340	3,727,034
Assaying and analysis	93,762	100,034
Asset retirement obligations	113,550	121,145
Camp and field supplies	41,433	44,205
Travel and accommodation	124,573	132,906
Total expenditures	7,732,005	8,139,508
DrownedProperty [Member]	'	'
Property acquisition and lease payments	39,051	41,663
Geological and geophysical	13,792	14,714
Project management	'	'
Drilling	'	'
Assaying and analysis	'	'
Asset retirement obligations	'	'
Camp and field supplies	'	'
Travel and accommodation	'	'
Total expenditures	$52,843	$56,378

6_OIL_AND_GAS_PROPERTY_INTERES3

6. OIL AND GAS PROPERTY INTERESTS (Details 1)	Dec. 31, 2013
	lease
Number of Leases	17
Land Area	'20,992
Annual Lease Payments	'CDN $73,472 / USD $69,078
June 15, 2006 [Member]	'
Number of Leases	3
Land Area	'4,864
Annual Lease Payments	'CDN $17,024 / USD $16,066
October 19, 2006 [Member]	'
Number of Leases	4
Land Area	'3,584
Annual Lease Payments	'CDN $12,544 / USD $11,794
November 2, 2006 [Member]	'
Number of Leases	4
Land Area	'5,632
Annual Lease Payments	'CDN $19,712 / USD $18,533
January 11, 2007 [Member]	'
Number of Leases	4
Land Area	'4,608
Annual Lease Payments	'CDN $16,128 / USD $15,164
January 24, 2007 [Member]	'
Number of Leases	2
Land Area	'2,304
Annual Lease Payments	'CDN $8,064 / USD $7,582

6_OIL_AND_GAS_PROPERTY_INTERES4

6. OIL AND GAS PROPERTY INTERESTS (Details 2) (USD $)	Dec. 31, 2013
Notes to Financial Statements	'
2014	$70,763
2015	70,763
2016	69,078
2017	69,078
2018	69,078
Thereafter	160,902
Total	$509,662

7_ASSET_RETIREMENT_OBLIGATIONS1

7. ASSET RETIREMENT OBLIGATIONS (Details Narrative) (USD $)	12 Months Ended			102 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Notes to Financial Statements	'	'	'	'
Asset retirement obligations	$139,623	$138,129	'	$139,623
Accretion expense	$10,487	$7,500	$8,647	$47,745

8_RELATED_PARTY_TRANSACTIONS_D

8. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Notes to Financial Statements	'	'	'
Consulting Fees	$53,304	$5,487	$26,582
Directors fees	$0	$0	'

9_SHARE_CAPITAL_Details

9. SHARE CAPITAL (Details) (USD $)	12 Months Ended			102 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Notes to Financial Statements	'	'	'	'
Net income (loss) for the year	($2,798,169)	($1,856,790)	$1,629,255	($15,914,965)
Weighted average common stock basic	80,057,824	71,340,773	68,847,251	'
Effect of options	'	'	8,128	'
Effect of warrants	'	'	330,072	'
Diluted	80,057,824	71,340,773	69,185,451	'

10_STOCK_OPTION_PLANS_Details

10. STOCK OPTION PLANS (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Options Outstanding	'	'	'
Cancelled	-500,000	'	'
Options Outstanding	1,000,000	'	'
Exercisable	800,000	'	'
Weighted Average Exercise Price	'	'	'
Cancelled	$2.19	'	'
Weighted Average Exercise Price Outstanding	$0.20	'	'
Plan 2006	'	'	'
Available for Grant	'	'	'
Beginning	4,700,000	6,100,000	6,100,000
Granted	0	-1,400,000	0
Cancelled	1,000,000	0	0
Ending	5,700,000	4,700,000	6,100,000
Options Outstanding	'	'	'
Options Outstanding	2,000,000	600,000	600,000
Granted	0	1,400,000	0
Cancelled	-1,000,000	0	0
Options Outstanding	1,000,000	2,000,000	600,000
Weighted Average Exercise Price	'	'	'
Weighted Average Exercise Price Outstanding	$0.46	$1.14	$1.14
Granted	$0	$0.16	$0
Cancelled	$0.17	$0	$0
Weighted Average Exercise Price Outstanding	$0.73	$0.46	$1.14

10_STOCK_OPTION_PLANS_Details_

10. STOCK OPTION PLANS (Details 1) (USD $)	Dec. 31, 2013
Options Outstanding	1,000,000
Weighted Average Exercise Price Outstanding	$0.20
Number of Options Currently Exercisable	800,000
Exercise Price 0.07 [Member] | 2006 Plan	'
Options Outstanding	200,000
Remaining Contractual Life	'8 years 6 months 11 days
Weighted Average Exercise Price Outstanding	$0.07
Number of Options Currently Exercisable	200,000
Exercise Price 0.13 [Member] | 2006 Plan	'
Options Outstanding	25,000
Remaining Contractual Life	'6 years 9 months 25 days
Weighted Average Exercise Price Outstanding	$0.13
Number of Options Currently Exercisable	25,000
Exercise Price 0.14 [Member] | 2006 Plan	'
Options Outstanding	200,000
Remaining Contractual Life	'8 years 6 months 11 days
Weighted Average Exercise Price Outstanding	$0.14
Number of Options Currently Exercisable	'
Exercise Price 0.20 [Member] | 2006 Plan	'
Options Outstanding	25,000
Remaining Contractual Life	'6 years 9 months 25 days
Weighted Average Exercise Price Outstanding	$0.20
Number of Options Currently Exercisable	25,000
Exercise Price 0.40 [Member] | 2006 Plan	'
Options Outstanding	25,000
Remaining Contractual Life	'6 years 9 months 25 days
Weighted Average Exercise Price Outstanding	$0.40
Number of Options Currently Exercisable	25,000
Exercise Price 0.60 [Member] | 2006 Plan	'
Options Outstanding	25,000
Remaining Contractual Life	'6 years 9 months 25 days
Weighted Average Exercise Price Outstanding	$0.60
Number of Options Currently Exercisable	25,000
Exercise Price 0.61 [Member] | 2006 Plan	'
Options Outstanding	200,000
Remaining Contractual Life	'3 years 3 months
Weighted Average Exercise Price Outstanding	$0.61
Number of Options Currently Exercisable	200,000
Exercise Price 0.74 [Member] | 2006 Plan	'
Options Outstanding	100,000
Remaining Contractual Life	'4 years 6 months 29 days
Weighted Average Exercise Price Outstanding	$0.74
Number of Options Currently Exercisable	100,000
Exercise Price 2.29 [Member] | 2006 Plan	'
Options Outstanding	200,000
Remaining Contractual Life	'2 years 6 months 22 days
Weighted Average Exercise Price Outstanding	$2.29
Number of Options Currently Exercisable	200,000

10_STOCK_OPTION_PLANS_Details_1

10. STOCK OPTION PLANS (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
		2006 and 2002 Plans [Member]
Number of Unvested Options	'	'
Unvested Beginning	1,425,000	50,000
Granted	0	1,400,000
Vested	-225,000	-25,000
Cancelled	-1,000,000	0
Unvested Ending	200,000	1,425,000
Weighted Average Exercise Price	'	'
Unvested Beginning	$0.17	$0.13
Granted	$0.13	$0.16
Vested	$0.14	$0.40
Unvested Ending	$0.14	$0.17
Weighted Average Grant Date Fair Value	'	'
Unvested Beginning	$0.07	$0.37
Granted	'	$0.07
Vested	$0.07	$0.12
Cancelled	$0.07	'
Unvested Ending	$0.11	$0.07

11_WARRANTS_Details

11. WARRANTS (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
		Warrant [Member]	Warrant [Member]
Warrants	'	'	'
Options Outstanding	'	16,413,885	13,866,265
Warrants exercised	-625,000	0	0
Warrants issued	13,772,296	10,231,667	2,547,620
Warrants forfeited	-500,000	-3,395,555	0
Options Outstanding	1,000,000	23,249,997	16,413,885
Weighted Average Exercise Price	'	'	'
Weighted Average Exercise Price Outstanding	'	$0.23	$0.35
Warrants exercised	$0.06	'	'
Warrants issued	$0.16	$0.10	$0.19
Warrants forfeited	$2.19	$0.23	'
Weighted Average Exercise Price Outstanding	$0.20	$0.27	$0.23

11_WARRANTS_Details_1

11. WARRANTS (Details 1) (USD $)	Dec. 31, 2013
Options Outstanding	1,000,000
Number Vested	22,124,997
Exercise Price	$0.20
Warrant One [Member]	'
Options Outstanding	7,020,710
Number Vested	7,020,710
Exercise Price	$0.20
Expiry	'2014
Warrant Two [Member]	'
Options Outstanding	2,950,000
Number Vested	2,950,000
Exercise Price	$0.53
Expiry	'2015
Warrant Three [Member]	'
Options Outstanding	2,547,620
Number Vested	2,547,620
Exercise Price	$0.19
Expiry	'2016
Warrant Four [Member]	'
Options Outstanding	2,106,668
Number Vested	2,106,668
Exercise Price	$0.07
Expiry	'2017
Warrant Five [Member]	'
Options Outstanding	10,022,296
Number Vested	'
Exercise Price	$0.14
Expiry	'2018
Warrant Six [Member]	'
Options Outstanding	7,500,000
Number Vested	7,500,000
Exercise Price	$0.20
Expiry	'2022
Warrant Seven [Member]	'
Options Outstanding	3,750,000
Number Vested	'
Exercise Price	$0.20
Expiry	'2023

12_INCOME_TAXES_Details

12. INCOME TAXES (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Deferred tax assets (liabilities)	'	'
Net operating loss carry-forwards	$1,124,700	$1,009,000
Capital losses	5,000	5,000
Office equipment	12,500	12,500
Oil and gas properties	281,000	281,000
Asset retirement obligation	52,300	41,500
Gross deferred tax assets	1,475,500	1,349,000
Valuation allowance	-1,475,500	-1,349,000
Net deferred tax asset	'	'

12_INCOME_TAXES_Details_1

12. INCOME TAXES (Details 1)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Notes to Financial Statements	'	'	'
Statutory federal income tax rate	-23.00%	-25.00%	-27.00%
Change in valuation allowance	-9.00%	-5.00%	-5.00%
Non-deductible stock-based compensation	3.00%	1.00%	2.00%
Non-deductible change in fair value of derivative Liability	32.00%	30.00%	30.00%
Effect of foreign exchange	-1.00%	1.00%	2.00%
Effect of reduction in income tax rate	-2.00%	-2.00%	-2.00%
Total	0.00%	0.00%	0.00%

12_INCOME_TAXES_Details_Narrat

12. INCOME TAXES (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Notes to Financial Statements	'	'	'
Canadian operating loss carry-forwards	'	$4,500,000	'
Operating loss carry-forwards expiration year Description	31-Dec-14	'	'
Canadian oil and gas dedication pools	9,000,000	'	'
Changes in valuation allowance	$126,500	$54,500	$56,500